Corporate Sustainability through Private Regulation: A Deluge of Standards The Importance of Policy Coherence in Pursuit of Sustainability

This chapter considers the question whether, and if so how, private regulatory norms aimed at achieving sustainable supply chains can contribute to closing the existing gap between legal and political sustainable development goals and the practice of European-based brands operating in the international supply chains of ready-made garments (RMG).

The RMG industry is a complex, globalised, and unsustainable industry. Profound change is required if this industry is to become more sustainable. However, the fact that the RMG industry – together with many other industries – operates at a global level implies that there is no one state that can unilaterally regulate the negative effects of the various supply chains involved therein. Given that no such unambiguous national legislative authority exists, in combination with the assumption that a solution based on formal international legislation is not feasible anytime soon, other alternatives to the formal judicial order of the old governance are clearly called for if meaningful change is to be realised.

In answer to a mounting call for increased sustainability from various stakeholders, European-based RMG brands selling their garments in the EU have adopted quality and sustainability certificates based on private regulation. This has led to a deluge of such standards and supplier agreements. The question is whether an abundance of private regulatory options is beneficial to making the RMG industry operate in a more sustainable fashion.

This chapter aims first to provide a theoretical account of the complex effects of private regulation on international supply chain relations, set against the background of a buyer-driven RMG industry. The sphere of influence of private regulation is then compared to that of formal law. The chapter subsequently describes the possible effects of private regulation on international supply chain relations, based on information and insights gained from two qualitative case studies conducted in the RMG industry. In the discussion section, the effects of implementing private regulatory norms in the RMG industry supply chains are debated.